THERE WAS a “developing myth” that Ireland had vast discoveries of oil and gas off its shores, Minister for Energy Pat Rabbitte told the Dáil.
He said a study sponsored by his department had estimated there could be in the order of the equivalent of 10 billion barrels of oil offshore. But that estimate was “yet to find potential” and was based on geological criteria and regional comparisons.
“Some commentators have chosen to represent this estimate in a manner that would suggest that this volume of oil and gas had actually been discovered offshore Ireland,” he added.
“This is quite clearly not the case and it is misleading to suggest otherwise.” Mr Rabbitte said it was also important to recall that the cost of drilling even 100 exploration wells in the Atlantic would be well in excess of €10 billion.
“Having regard to the high risk of unsuccessful exploration, it is very difficult to make the case that the Irish taxpayer should invest billions in an intensive exploration effort at this time,” he added.
“Instead, this should be left to the industry, who can include exploration in the Irish offshore as part of a balanced international exploration portfolio.”
He said the bottom line was that if Ireland’s petroleum tax terms were fixed at the same level as those in the UK or Norway, no exploration investment would take place in Ireland.
The Minister was responding to a Sinn Féin Private Members’ motion calling for the establishment of a State exploration company, holding a 51 per cent share in all oil and gas finds.
Sinn Féin spokesman Martin Ferris said having a proper State stake in oil and gas finds, and imposing the sort of tax and royalties which his party was proposing, would provide the State with the same sort of bonanza that had accrued elsewhere.
“Contrary to the myth being spread here, states which imposed such terms are not necessarily radical or even to the left,” he added.
“If the companies are happy to pay a tax rate of 78 per cent in Norway and an average international rate of 68 per cent, then surely they would be happy to pay a tax rate of 50 per cent here and to concede the State share.”
He said Ireland’s oil and gas resources, fisheries, forestry, wind and wave energy, ought to be used to bring about a revival of enterprise and the spirit of the people.
